Strong leadership skills aren’t just an industry-wide preference for the supply chain, logistics, and warehousing industry; they’re crucial attributes that directly or indirectly contribute to the successful functionality and execution of specific operational standards.
Preparation, experience, and foresight are three of the most important attributes of being a good leader in any industry. However, even the most experienced and level-headed leaders aren’t immune to certain strategic and unprecedented blind spots.
Black swan events can happen to anyone and these types of situations are proof that it’s essential to have a workable contingency plan—or several—in place at all times in case something goes awry. Risk potential is always prominent in business ventures, regardless of size or stature. But black swan events are a special kind of breed in their own right.
What Is a Black Swan Event and How Can It Impact Your Business?
Black swan events are characterized and defined by three unique traits:
- Total unpredictable or something that’s unforeseeable
- Having a severe impact on a person, a group of people, society, or a business
- The overpowering and often misguided belief that hindsight can rationalize the specific event in question and its impact (e.g. we should have seen it coming given the overwhelming evidence at the time of the event)
Basically, the nature of the black swan event eludes predictability and it’s therefore considered to be unprecedented, which is why we often lack adequate preparation or mitigation for such an event. By many accounts, the COVID-19 pandemic could be considered a global black swan event as it ticks off all of the characteristics mentioned above.
How to Offset the Effects of Black Swan Events for Your Supply Chain
Given the fact that black swan events are typically unpredictable and unprecedented, you might be under the false impression that there’s nothing you can do to prepare your supply chain for such an event. The responsibility of supply chain leaders is to do everything in their power to try to minimize the amount of risk incurred during a black swan event. That implies the perpetual need for several contingency plans to be put in place well ahead of time to help mitigate the damages caused by black swan events.
Here are five factors supply chain leaders should consistently employ in their operations.
Clear and Effective Communication across the Board
When it comes to running a successful manufacturing, distribution, and delivery business, the lines of communication across all channels must be clear, concise, and consistent. Basically, everyone in your organization from the top-level figureheads right down to the warehouse and manufacturing associates, all need to be on the same page at all times.
True leadership is the embodiment of a concrete understanding of all levels of your business and that includes the supply chain operations.
Black swan events demand excellent communication skills so that you can steer your company, shareholders, team leaders, and associates in the right direction and everyone knows exactly what they have to do to get there.
Awareness of Disrupting Factors
It’s a given that you need to know the ins and outs of your business and that includes your supply chain operations. Otherwise, you have no way of knowing the day-to-day challenges and shortcomings of your business.
Additionally, a lack of knowledge and awareness of these challenges can also create huge blind spots for your business, leading to a breeding ground for disrupting factors to reign supreme.
A big part of risk management is actually being aware of the types of risks your business stands to face. But it also entails being prepared for the risk and disrupting factors that aren’t always so obvious. It’s like steering a ship across the Atlantic knowing that there are icebergs out there, but not preparing for storms.
Form a Rapid Response Team for All Kinds of Events
Although it’s impossible to ever be fully prepared for black swan events given their unpredictable nature, supply chain leaders can and should form general service rapid response teams for a variety of situations.
Inclement weather, traffic delays, accidents, geopolitical conflicts, and global health crises are just some of the potential risk factors the supply chain industry faces. These are all general facts of life. But the specific situations and how local, regional, and federal governments respond to them are entirely unique.
Situation-based rapid response teams can help your team better navigate and mitigate these issues to maximize production and fulfillment during black swan events.
Empathize with the Situation
Empathy is always in high demand, but most often in short supply. Black swan events are typically high-stake situations that range from devastating natural disasters to global health crises, or even diplomatic discrepancies.
These are all high-stress situations that not only directly impact your customers, but they also have an emotional and physical impact on your team members. Keep that in mind when you’re putting together a rapid response team for your supply chain.
Business and Supply Chain Flexibility
COVID-19 has forever changed the way most businesses do business. As new challenges continue to arise out of the woodwork, your business and your supply chain protocols need to remain flexible enough to adapt to the new standards being put forth. Black swan events are unpredictable and therefore, you need a supply chain operation that can easily adapt to each new situation accordingly.
Black swan events can happen at any time and anywhere. As our name implies, Lean Supply Solutions is committed to providing our clients with the support, expertise, and logistical solutions to help them overcome the unforeseen challenges of black swan events. We can help minimize the risk factor for your business while maximizing and streamlining your supply chain productions.
Contact us today to get a free quote and learn more about our supply chain services.
Recessions are inevitable cyclical occurrences during times of severe economic downturn. Essentially, what this means is that recessions are the direct result of national or global events such as the COVID-19 pandemic that cause the general public to stop spending money or limit their spending as much as possible.
Supply chain companies are especially hard hit during these tough times as the demand for residential and commercial product shipments usually takes a massive nosedive. Since a lot of people have been laid off indefinitely during this pandemic, their primary goal is to save money and only spend it on essential items like groceries.
Even though a lot of businesses in Canada are slowly entering into the next phases of reopening their doors, the threat of COVID-19 is still effervescently looming in the air. And that means many supply chain distribution and management facilities have either completely halted or slowed down their production lines to accommodate the changing economic climate. While many cross-border shipments have continued through the pandemic, the process of supply chain fulfillment in many sectors has slowed down due to heavy regulations and precautions.
Here are a few logistics management tips to help recession-proof your supply chain as you prepare for the foreseeable aftermath of the current economic downturn.
Diversify Your Business and Supply Chain Partnerships
As any experienced logistics management team knows, it’s important to perform regular systematic and in-depth assessments of all of your current business practices and partnerships. This can help you identify inconsistencies, inaccuracies, inefficiencies, quality control deficiencies, and any other potential issues that may inadvertently be slowing down your processes early on.
Even a healthy and profitable economic climate demands routine business and supply chain efficiency assessments to ensure that you’re always prepared in the event of a recession.
Maintaining strong business partnerships and diversifying your professional relationships can help you ascertain better financial security during the tough times. Take the time to carefully assess the capabilities of your supply chain to deliver goods and services, the demand of your products and services during high and low times, and the quality and type of equipment used by your supply chain logistics management team.
Keeping all of this information in your back pocket will not only help strengthen your existing logistics management partnerships in the good times and the bad, but it’ll also help you establish meaningful and lucrative supply chain partnerships in the future.
Prepare Several Feasible Contingency Plans
Financial and supply chain contingency plans are essential for any business to survive a potential or incoming economic recession and evade total ruin. After a few good quarters where businesses have managed to stay in the black, many business owners seem to inexplicably develop a false sense of thinly veiled financial security that they falsely believe will carry them through the most severe economic downturn. Unfortunately, a lot of these businesses are in for a rude awakening.
Without a reliable contingency supply chain (or several) in place, you could be forced to stop production on very short notice or no notice whatsoever. Not only will you be forced to absorb the loss and financial risk involved, but in light of these unpredictable and precarious financial times, there’s no telling whether or not you’ll be able to recoup those losses in the future.
Securing a reliable contingency supply chain and logistics management partnership from the very beginning or before an economic downturn occurs isn’t just a smart business strategy; it also provides you with an alternate channel of product fulfillment, retail distribution, and manufacturing support when you need it most.
Streamline the Process through Automation
Modern technology has made it a lot easier for businesses to streamline their practices and processes through automation. By storing important information such as order details, invoices, client preferences, fulfillment and delivery timelines, etc. on a secure cloud network, you can conveniently track each order, update part and product inventory, identify potential problem areas that are slowing down the process, and make necessary adjustments automatically.
If you happen to notice an issue during the production process, automation allows you to quickly communicate the problem to the supplier so that they can quickly implement a feasible remedy and step up their quality control procedures.
Establish and Maintain Proper Communication at Every Level
One way to sidestep or mitigate potential production hindrances during a recession is to maintain strong levels of communication at every level of the operation. From your frontline production workers to warehouse managers and beyond, it’s important to thoroughly understand every step of your production process so that you can work toward finding feasible solutions in the event of an economic crisis.
Recessions are notorious for causing strategic and production-based standstills as the supply of the products and parts begins to outweigh the demand. Sometimes this process is a slow burn that can take place over the course of a few weeks or months, giving you more time to prepare. But in the case of rapid business and government shutdowns due to rising public health concerns, it can be swift and unrelenting.
Unfortunately, a recession such as the one we’re currently facing could result in a sudden massive surplus of inventory, particularly in the farming and food production sectors. What’s worse is partnering with a supply chain that suddenly doesn’t have the resources, capacity, or sufficient personnel (e.g. warehouse workers, delivery truck drivers, etc.) to fulfill orders.
Outsourcing your supply chain operations can help you mitigate a lot of these issues by placing the burden of order fulfillment responsibility on the logistics management company you hire.
If COVID-19 put a huge wrench in your company’s supply chain operations, Lean Supply Solutions can help you build up a strong, efficient, reliable, and responsive end-to-end logistics management strategy that perfectly suits the needs of your business. With an emphasis on order fulfillment, tracking, and fast delivery times, our supply chain professionals are here to help you get through the tough times.
To learn more about our exclusive logistics management solutions and to get a free no-obligations quote, contact us here.